Editorial

Transparency essential for arms disposal project

The Yomiuri Shimbun

The lack of transparency is extreme in a contract signed between the government and a Tokyo-based consultancy for an abandoned chemical weapons disposal project involving a massive amount of government money. We hope investigators will uncover the whole truth behind a lucrative business that entails vested interests tied to the projects.

On Wednesday, the special investigation squad of the Tokyo District Public Prosecutors Office arrested a former president of Pacific Consultants International and three others on suspicion of aggravated breach of trust in connection with the government project to dispose of chemical weapons abandoned in China by the Imperial Japanese Army during World War II.

Since fiscal 2004, the PCI group, including the Abandoned Chemical Weapons Disposal Corp. (ACWDC), a wholly owned subsidiary of PCI's holding company, has been the exclusive winner of discretionary contracts related to the project awarded by the Cabinet Office. Orders totaling about 23 billion yen were given to ACWDC between fiscal 2004 and 2006.

The PCI group allegedly increased profits by recommissioning work on the project secured by ACWDC to several affiliated and other companies. The four arrested officials are said to have misappropriated 120 million yen of project outlays in the process. The prosecutors also intend to build a fraud case against the accused as they are suspected of padding bills on project fees.

Questionable decision

The PCI group was only tasked with conducting a preliminary survey to decide how to dispose of the abandoned chemical weapons. Was this really a job that required such a high degree of expertise that the contract for it needed to be discretionary and awarded to just one company?

In 2004, the Japan International Cooperation Agency suspended PCI from bidding on official development assistance contracts because of accounting irregularities. In 2006, the Board of Audit found that PCI had embezzled a total of about 140 million yen in ODA projects in 16 countries, including Costa Rica.

The Cabinet Office must bear a heavy responsibility for placing the disposal project in the hands of such a tainted firm. The prosecutors have to thoroughly investigate how and why the office arranged contracts with PCI. They also must clarify how the misappropriated money was used by the former PCI president and others.

Taking care in future

Between 300,000 and 400,000 chemical munitions abandoned by the Imperial Japanese Army are said to have remained buried in the Haerbaling district of China's Jilin Province. The government has been shouldering all of the expenses associated with the project to render the weapons harmless based on a 1999 memorandum between Tokyo and Beijing. Japan had spent a total of 47.1 billion yen by the end of fiscal 2006.

Hundreds of billions of yen more will reportedly be needed for efforts to locate and recover the chemical weapons and to make them harmless.

At the beginning of this fiscal year, the Cabinet Office stopped offering discretionary contracts and introduced general public competitive bidding on the project. This is a sensible measure to eliminate collusion with private firms.

Some observers point out the costs of the project have jumped unnecessarily during negotiations with the Chinese side. The Board of Audit and other relevant government organizations therefore need to carry out stringent checks to determine if the scale of the project has been set at an appropriate level.

Transparency is paramount if the disposal project is to be carried out satisfactorily.

(From The Yomiuri Shimbun, April 24, 2008)